A pilot by Fiserv Inc. involving the use of check-imaging software that enables consumers to deposit checks into their bank accounts through their cellular telephones represents another challenge for the ATM industry. If the product proves successful, it could cause a sizable reduction in ATM use, says one industry analyst.

"It seems likely depositing checks from your phone could have a significant impact on ATM use," Aaron McPherson, a research manager for payments at IDC Financial Insights in Framingham, Mass., tells ATM&Debit News. "Personally, the only reason I go to my bank branch is to deposit checks."

Moreover, consumers already have been making fewer trips to the ATM to withdraw cash because debit and credit cards are accepted at most merchant locations, McPherson adds.

Fiserv is testing software from Mitek Systems Inc. with some of the banking-technology company's clients and hopes to expand the program, says Rod Springhetti, vice president of business planning for global payment solutions at Brookfield, Wis.-based Fiserv.

ATM manufacturer NCR Corp. announced in April a similar agreement with Mitek that enables consumers to deposit checks into their bank accounts with their cellular telephones.

An NCR spokesperson, however, declined to comment on whether bank deposits made with cellular telephones would affect ATM use.  NCR is based in Duluth, Ga.
Fiserv  is offering mobile banking through its relationship with a New Zealand company.

The firm signed an agreement in September with Mobile Commerce Ltd., or M-Com, to provide mobile-banking services under the name Mobile Money from Fiserv, says Marc DeCastro, research manager for consumer banking and credit at IDC Financial Insights.

Mitek's Mobile Deposit application enables banks to accept checks from camera-equipped cell phones, including Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerry phones. When depositing a check, the consumer initiates a mobile-banking session, keys in the deposit amount and snaps photos of the front and back of the check. Mitek's software captures the check image and prepares it for transmission to the bank, Mitek says.

Mitek's IMageProve technology corrects image distortions and skewing and confirms that it meets Check 21 image-quality standards before transmitting the check, says Mitek, adding that the process is similar to making deposits from home using a scanner. However, its process extends remote deposits to 100 million cell phones so users require no additional equipment.

Fiserv has yet to determine whether it should position Mitek's Mobile Deposit software as a remote-deposit product or as a mobile-banking product, but Fiserv is confident it will find an audience, Springhetti says, noting he is focused "more on what I think the opportunity is than whether the technology works. I was convinced very early that the technology is very plausible. ... It's very exciting, it's very innovative."

Not all consumers write checks, but "every socioeconomic group receives checks," he says. "There is definitely, we believe, a consumer segment that is interested. What you've got to do is intersect that with, how many checks do they really deposit? It's not a volume play with them. It's much more a convenience play."
Business opportunities exist as well, particularly among vendors such as florists, who specialize in perishable goods and want to validate the payments they receive upon delivery, he says.

"There's so much excitement in that market niche because they can start that check in the check-processing cycle as quickly as possible and get notification of any problem as early as possible," Springhetti says. "It's a group that the banks will not be able to ignore."

Louise Steller, Mitek director of sales, says the San Diego-based company has similar deals with about 10 vendors, though "Fiserv is definitely one of the larger vendors that we're working with."

As more phones are built with hardware capable of taking photos clean enough to use for image deposit, more vendors and banks are expressing interest in the technology, Steller says. "Six years ago this wouldn't have been possible at all," she says.
Fiserv is in a good position to find the technology's sweet spot, Springhetti says.
"Banks were looking for a vendor who understood the remote-deposit-capture world and understood the mobile-banking world because it really is an intersection of those two things," he says.

Fiserv is working with some banks to gauge the system's appeal to those audiences, and "as we complete these customer validations, we have both of those groups participating, and it will help guide when we will make it available in various aspects," Springhetti says.

Fiserv eventually could offer Mitek's technology as more than one type of product, customized by each of its teams to best suit their own audiences, though it is too early to make that decision, Springhetti says.

For Mitek, "the announcement from Fiserv is a big step forward," McPherson says. "I consider its channel partnership important because Mitek wasn't getting any traction."

This actually works to Fiserv's advantage as it conducts its tests, McPherson says, noting the company is on the right track in pitching the technology to consumers and small businesses instead of to larger merchants.

To those smaller clients, "depositing checks is a big pain," he says. "It's like the last remaining reason to go to a branch." ATM

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